Terna S.p.A. Unsponsored ADR ((TEZNY)) has held its Q2 earnings call. Read on for the main highlights of the call.
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The recent earnings call for Terna S.p.A. Unsponsored ADR highlighted a robust financial and operational performance, marked by substantial investments in grid development and renewable energy initiatives. The company showcased successful financial strategies, including a notable green bond issuance. Despite facing challenges such as a temporary decrease in renewable energy contribution and increased net debt, the overall sentiment was positive, with the strengths significantly outweighing the weaknesses.
CapEx Growth and Investment Plans
Terna reported a remarkable 27% increase in group CapEx, reaching EUR 1,390 million, setting a new record in the company’s history. These investments are strategically aimed at enhancing grid efficiency, resilience, sustainability, and security, which are crucial for integrating renewable energy sources into the national grid.
Financial Performance
The company experienced an 8% growth in both group revenues and EBITDA, with revenues rising by approximately EUR 140 million and EBITDA by EUR 103 million compared to the first half of 2024. This financial upturn also saw group net income increase to EUR 588 million, reflecting an 8% year-on-year growth.
Renewable Energy Achievements
In May, renewable energy sources covered 56% of electricity demand, marking the highest monthly value ever recorded. Solar production saw a significant year-on-year increase of 23%, reaching 22.1 TWh, underscoring Terna’s commitment to renewable energy.
Successful Green Bond Issuance
Terna launched its first European Green Bond with a nominal amount of EUR 750 million under the new EUR 4 billion EMTN Programme. The issuance was met with strong demand, outstripping supply by nearly five times, highlighting investor confidence in Terna’s sustainable initiatives.
Strategic Partnerships and Projects
The company signed a Memorandum of Understanding with Microsoft to support its digital transformation efforts. Additionally, Terna launched the Adriatic Innovation Zone to foster technological excellence, further solidifying its strategic partnerships.
Slight Decrease in Renewable Energy Contribution
In the first half of 2025, renewable sources accounted for 49% of national net total production, down from 53% the previous year. This decrease was primarily due to a reduction in hydroelectric production.
Increased Net Debt
Net debt rose to about EUR 12 billion by the end of June 2025, higher than the year-end value of 2024. This increase was mainly attributed to accelerated CapEx and dividend payments.
WACC Reduction and Regulatory Challenges
The Weighted Average Cost of Capital (WACC) was reduced from 5.8% to 5.5% in 2025. The regulatory environment remains challenging, with ongoing adjustments in tariff recognition posing additional hurdles.
Forward-Looking Guidance
Terna delivered a strong set of financial results in the first half of 2025, with group revenues and EBITDA both increasing by 8%. The company plans to continue its investment strategy, with over EUR 23 billion earmarked for grid development projects by 2034. Despite a complex economic environment, Terna has confirmed its 2025 full-year guidance, reflecting its robust financial profile and strategic focus on supporting the energy transition.
In summary, Terna’s earnings call painted a positive picture of the company’s financial health and strategic direction. The significant investments in grid development and renewable energy initiatives, coupled with strong financial performance, position Terna well for future growth. Despite some challenges, the overall sentiment remains optimistic, with the company’s strategic initiatives and financial strategies paving the way for continued success.